Left Unchanged
for the 11th Consecutive Time at the Sept. 25, 2018 MPC Meeting

External
Reserves

$43.97bn

As atOctober3,
2018. A c.0.14% decrease from $44.03bnon October2, 2018

Brent Crude

$85.84pb

As at October 4,
2018. A c.0.93% decreasefrom$86.65pbon
October 3, 2018

Bonds

Yields
in the bond market compressed marginally by c.1bp, with slight buying interests
still evident on select maturities during the day. We however note the peculiar
support for the longer term yields at c.15% in the past three sessions starting
the new month, with trades done as low as 15.001%, but no lower.

Despite
the recent successes by the DMO at its past FGN Bond and NTB Auctions, market
players remain skeptical of the yet to be released Q4 FGN Bond calendar, with
expectations of a higher level of planned borrowings compared to Q3. We are
also expecting a second tranche of the FGN Sukkuk Bonds to be announced
shortly.

Benchmark FGN
Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

15.54 13-Feb-20

13.65

13.08

(0.10)

14.50 15-Jul-21

14.88

14.16

0.02

16.39 27-Jan-22

14.41

13.92

0.00

14.20 14-Mar-24

14.96

14.77

(0.03)

12.50 22-Jan-26

14.80

14.63

0.03

16.29 17-Mar-27

15.09

14.93

(0.01)

13.98 23-Feb-28

15.14

15.05

0.04

12.15 18-Jul-34

15.17

15.08

0.02

12.40 18-Mar-36

15.20

15.02

0.03

16.2499 18-Apr-37

15.05

14.99

(0.12)

Source: Zedcrest Dealing Desk

Treasury Bills

In line with our
expectations, yields in the T-bills market trended higher by c.10bps as the CBN
floated an OMO Auction to mop up excess inflows from maturing bills. The OMO
was met with signifcant demand of c.N553bn of the N400bn offered. The CBN consequently
sold to all subcribers, with rates maintained at 12.50% and 13.50% on the 182
and 364-day bills respectively.

We expect yields to close
the week on a relatively calm note, with buying interests relatively quietened
by the signifcant OMO sale today.

OMO Auction
Result

Tenor

Rate (%)

Offer (N’bn)

Sub (N'bn)

Sale (N'bn)

182 days

12.50

100.00

80.62

80.62

364 days

13.50

300.00

472.37

472.37

Benchmark FGN Treasury Bills

Description

Bid (%)

Offer (%)

Day Change (%)

1-Nov-18

12.75

12.20

0.35

6-Dec-18

12.75

12.20

0.35

3-Jan-19

12.75

11.90

0.60

14-Feb-19

12.75

12.35

0.30

14-Mar-19

12.70

12.25

0.20

4-Apr-19

12.50

12.20

0.10

18-Jul-19

13.00

12.45

0.00

1-Aug-19

13.00

12.50

0.00

12-Sep-19

13.25

12.75

0.35

Source: Zedcrest Dealing
Desk

Money
Market

The OBB and
OVN rates shot above single digits to close today at 11.67% and 12.58%
respectively, as the CBN mopped up c.N553bn off system liquidity via an OMO
Sale. System Liquidity is consequently estimated at c.N120bn positive, with
inflows form OMO maturities (c.N268bn) providing some cushion for rates in the
market.

We expect
rates to remain relatively unchanged tomorrow, as there are no significant
outflows expected.

Money Market Rates

Current (%)

Previous (%)

Open
Buy Back (OBB)

11.67

4.25

Overnight
(O/N)

12.58

5.00

Source: FMDQ, Zedcrest Research

FX Market

At the Interbank, the Naira/USD rate remained
stable N360.40/$ (spot) and N361.34/$ (SMIS). At the I&E FX window, the
NAFEX closing rate appreciatedfurther by c.0.06% to N363.57/$ from N363.78/$
previously.At the parallel market, the cash and transfer rates remained
unchanged at N359.50/$ and N362.00/$ respectively.

FX Market

Current (N/$)

Previous ( N/$)

CBN
Spot

306.40

306.40

CBN
SMIS

361.34

361.34

I&E
FX Window

363.57

363.78

Cash
Market

359.50

359.50

Transfer
Market

362.00

362.00

Source: CBN, FMDQ, REXEL BDC

Eurobonds

The NGERIA sovereigns turned bearish in
today’s session, with yields trending higher by c.10bps on average, amid a
continued spike in the US treasury rates (NB: 10yr UST @ 3.19%). The 30-yr bond
was the most hit, down by c.2.00pct in price terms on the day.

Market
Players were also slightly bearish on the NGERIA
Corps except for slight gains on the FIDBAN 22s. We witnessed slight
retracements on the SEPLLN 23s and ACCESS 21s snr, and slight selloff on the
GRTBNL 18s and ZENITH19s.